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American Leyland

The US motor industry seems about to fail. Credit insurers are now withdrawing their support as the firms burn through cash, with faltering sales and outstretched hand for charity. But, with their size, their number of jobs and their Main Street history, these car firms have been deemed too important to fail.

If the Democrats do decide to rescue the US car industry via a bail-out, they will rationalise and reorder. Perhaps they will even wish to intervene as to which models and which research should be undertaken. Think of the opportunity for renewables…renewing jobs, renewing pork, renewing votes. By the end of this process, it is doubtful if there will be any US car industry at all. Congress will have undertaken a wonderful role in clearing out the undergrowth for more efficient rivals and Detroit will go the way of Morris, Austin and the Triumph marques.

36 comments to American Leyland

  • tdh

    Years ago there was an editorial in the New York Times, back when it still had a decent reputation somehow (except for the “All the news that fits, we print.” joke). The editorial said that we’ve been subsidizing the auto industry all these years, and that it was performing badly, but that the computer industry, which was not being subsidized, was amazingly successful.

    Their conclusion? Subsidize the computer industry. I canceled my subscription, which seems in retrospect to have been only of short duration.

    Let’s look forward to the socialists’ predictable success and give them the appropriate respect. After all, they’re doing their best, and if anything goes wrong, it couldn’t possibly be their fault, because they have such remarkably good intentions. (Sorry, but I have to add a smiley here; a naif or a leftist might be reading this.) :-)

    Somehow I’m picturing very green roads in the vicinity of Detroit….

  • Kev

    I’ve read and heard lots of comments in various places about how the American car companies can’t provide the sort of smaller, more economical cars that many people want these days, and thus are losing lots of sales to Japanese and Korean companies who are better at making this sort of car.

    What I don’t understand, is why. Why the hell don’t Ford and GM just grab some designs from their European branches and start churning them out in Detroit? Things like the Ford Ka or Fiesta, Vauxhall/Opel’s (GM, for those that don’t know) Corsa and Astra… These all manage quite well to compete with Japanese and Korean cars in Europe, so why not America, if that’s the sort of car that people want to buy now?

    I suppose the answer is probably something along the lines of “Incompetence. That’s why they’re failing and want a bailout!” Unless maybe they’re screwed because their loyal customers would rather not buy a car than buy a small car :)

  • CaptDMO

    Anyone interested in a slightly used British, um..American, um…Indian Jaguar?

  • Eric Anondson

    They are not car companies any longer. They are benefits distributors that happen to also make vehicles on the side.

  • Zevilyn

    Car companies are more deserving of bailouts than the wretched banks (whose incompetence makes them unfit for their purpose).

    In the case of the US, their car companies are, like their banks, run by greedy CEOs who willget big bonuses anyway so don’t care if the compnay succeeds or fails.

    Come to think of it, WHY are taxpayers forced into putting their money into banks by the government (which severely punishes you if you don’t have a bank account).

    I would define the enforced bank account society we live in as fascist.

  • The False God

    Is the previous post serious or a joke?

    I can’t tell.

    Maybe the politicians should get out of policy making. They’re pretty bad at it. I could hire a SeaWorld dolphin to make more intelligent economic decisions and expect better accountability.

    At least the dolphin couldn’t talk its way out of it if it screwed up.

  • thomass

    Posted by Kev at November 15, 2008 01:22 AM

    “What I don’t understand, is why. Why the hell don’t Ford and GM just grab some designs from their European branches and start churning them out in Detroit?”

    I don’t really think that is the problem. Ford and GM have some ok midsized cars (people don’t really want small but non hybrid cars here IMO…). Its labor costs. They’re huge for the big three because of their union contracts.

  • MikeMangum

    “What I don’t understand, is why. Why the hell don’t Ford and GM just grab some designs from their European branches and start churning them out in Detroit?”

    Due to the way labor costs are structured, they have almost (but not quite) fixed labor costs per vehicle, so they need to make big ticket items to come out ahead.

  • SamIam

    The only way I could support a federal bailout is if the unions are busted as a condition and banned for at least 20 years.

    Due to the utter stupidity of the American people on Nov. 4, this is an impossibility. The Dems will feed the companies and directly transfer taxpayer money to the bloated unions to keep it all going a little longer.

    I’m afraid we are headed for a great depression because with 58-60 seats in the Senate and a radical left leadership and a radical left President who is likely to make FDR style mistakes and worsen and lengthen problems.

    Know what? We deserve it for electing them. I feel sorry for the children who will suffer though.

  • Sunfish

    If GM didn’t make cars that suck in all ways great and small, they wouldn’t be in this position.

    If I’m going to spend forty grand on something the approximate size of a Toyota Land Cruiser, I damn well expect it to handle as well as an LC and to have the same reliability as the Toyota. I can get that from Toyota. Escalades/Trailblazers handle for crap and spend entirely too much time in the shop.

    GM went into the era of $3-4/gallon gas with an SUV emphasis. Toyota, Nissan, Masda, and Honda were able to push midsize sedans out the door in a timely fashion, but not GM or Ford.

    And that’s without even addressing how the UAW priced themselves out of the market.

    As The Emperor Misha would say, F.E.T.E.

  • bill-tb

    Hey look at it this way, all this is happening, and we haven’t even reached the real culprits yet, Fannie Mae and Freddie Mac. They probably are going to need huge bailouts, and a general flushing. Just goes to show, how much fun Democrats can have with their very own special piggy bank GSEs. You notice, Obama is hiring their former scoundrels in chiefs — From Gorelick, who caused 9/11, to the former head of Fannie Mae, Howard Raines, all being brought on board to ‘fix the problem’. Wanna bet on the fix part?

    I bet the Democrats are hoping people don’t know how GSEs backed the crap mortgages with the full faith and credit of the U.S. Treasury, mainly by forcing banks to make loans to unqualified people, and then repackaged the crap mortgages for investment grade sale which had the effect of forcing this disaster on the world’s financial system. All in the name of fairness and stopping redlining.

    Just remember these things, markets require companies who produce goods and services which in turn require willing people who want to buy those very same goods and services. These ‘buyers’ work for companies who produce goods and services which are in turn sold to others. If either party opts out, buyers or sellers, no market, no economy, lights out.

  • kiwikit

    Why doesn’t the UAW bail them out. It’s they who will win if these bloated, poorly managed companies get refunded and why not let the funding come from the group which has taken millions from the auto guys for decades?

  • djr

    And when Japan, Germany… scream to the World Trade Organization about US subsidizing cars, then what?

  • Paul Marks

    Even in the present economic crises their are factoriesb building cars and making a profit in the United States – but not unionized plants.

    If General Motors and so on wish to continue building cars they should file for Chapter 11 bankruptcy and get rid of their union contracts (which were forced on them via the government not allowing them to fire the workforce for not turning up for work – i.e. going “on strike”).

    “But then there will be no pensions and health care for workers”.

    The auto companies and their employees can not both pay taxes for government pensions (Social Security) and government health care (such as Medicare) and then provide private pensions and private medical cover AS WELL.

    This is why a lot of big corporations in the United States are in favour of the government providing even more pensions and health care (so they do not get as much pressure to), but this simply will not work.

    People compare President Elect Obama to F.D.R. – but they simply have not done the math.

    The welfare state spending of the United States government as a percentage of the economy is already VASTLY greater than it was under F.D.R.

    And this does not even take account of Bush-brain’s insane bailouts for the banks and other such (which we now hear means full or part nationalization for many of these enterprises – something that F.D.R. rejected).

    “Obama is a second F.D.R.” claims “Time” magazine and so on.

    Actually the America of George Walker Bush is already vastly more statist than the America of F.D.R.

    If President Obama and his Conrades in Congress try and make the United States even more statist then (in spite of the much better technology today which has led to higher living standards) there will be economic collapse.

    No way round it – period.

  • Wes S.

    Due to the way labor costs are structured, they have almost (but not quite) fixed labor costs per vehicle, so they need to make big ticket items to come out ahead. – Mike Mangum

    Except Detroit can’t come out ahead even making expensive pickups, SUVs and well-optioned midsize and full-size cars. GM, Ford and Chrysler now have unionized assembly-line workers making $30-35/hour, making $30,000 cars for working-class people who only make fifteen dollars an hour. The Big Three were already hemorrhaging cash even before the US economy went south.

    Not to mention that the Big Three’s build quality, even on their profitable models, keeps slipping, too…which doesn’t do much for repeat business. If I had to buy another car right now – the last thing I want to do in this economy! – I’d certainly be looking at Honda, Toyota or Mitsubishi.

  • Ed Adams

    “What I don’t understand, is why. Why the hell don’t Ford and GM just grab some designs from their European branches and start churning them out in Detroit?”
    Ford is already in the process of doing that. The new (2 years) CEO Alan Mulally has rationalized the worldwide engineering, and the Fiesta will be the first marketed in the U.S., followed by the new Focus. Please note that Ford North America has already achieved quality parity with Toyota and Honda.

    The real culprit in the disparity between the U.S. and Europe is the method pursued to achieve economy. The U.S. has kept fuel prices low and pursued economy through Corporate Average Fuel Economy regulations. If you are a consumer in the U.S., it is easy to rationalize getting larger vehicles because the costs of operation are low relative to Europe. And, it lets politicians off the hook. Note that the gasoline price spike caused an immediate change in buyer habits; truck and SUV sales disappeared overnight. The most rational approach (dare I say it) to achieving Gov. fuel economy goals is a fuel tax on the order of what the Europeans have done.

  • The other problem that the Big Three have is building a small enough car, at a loss it appears, to meet gas milage standards.

    Looking at British Leyland is also interesting because one of their failure points was that they competed against themselves…just as Ford/Mercury and Chevy/GMC do. We just have a big enough market that it didn’t truly hurt them until recently. Ford should shut down Mercury and GM close GMC. They won’t though because Wall Street won’t understand.

  • GM and Ford are bringing over the European “people movers” cars that have nearly the capacity as SUV’s- but better MPG and slightly lower.

    The sad fact is the US makers were making what the people wanted. Don’t you remember 5 years ago when the jerk on your block bragged about his SUV and all the stuff he could haul? Never mind that he really only needed the capacity when he moved or went on vacation.

    Throw in some some government regulation (the MPG standards which penalize companies that make cars – but not trucks (SUV’s). The safety feature that kids can’t ride up front- SUV’s fit the plan.

    Look at the nineties- Ford came out with a new Taurus (admittedly ugly ) and the Explorer. Before people realized that the Explorer would flip over like a jumping bean- it sold like crazy- with crazy profits. So they focused on SUV’s

    Oh- unions- healthcare premiums demanded they move units with high profits- again- SUV’s

    Before we laud the Japanese and Koreans- note that they made huge investments into the Tundra, Ridgeline, Sonoma, etc- their sales are way down too.

  • Cuic Cuic

    What about Volkswagen? There’s a business model Obama could get behind (pre-1940 version).

  • George

    What would happen to GM, Ford, and Chrysler if people in the “Red States” decided to boycott all vehicles build by UAW workers? Where do they think they sell all those pickup trucks? The UAW actively works to get candidates elected that support a more active role of government. As someone who wants smaller helpings of government, it seems to me that I’m better off it the UAW has less money to use against me.

    Along the Red/Blue political map theme, ever notice that the foreign owned auto manufacturing plants are usually in a small town outside of urban areas. New transplants are built on red areas on the map while the domestic brands tend to have urban factories located in the blue spots on the map.

  • Paul Marks

    George:

    When I was young I hoped that people copied economic and social success – but that is not the way politics works.

    Way back a hundred years ago the voluntary assocations (the “Friendly Societies” what Americans of the same period called Fraternities) in Britain worked much better in providing health care and old age pensions than the Prussian government did.

    So Britain copied Prussia/Imperial Germany (not the other way round).

    New Hampshire has had a much better economic record than Mass over the last several decades – so New Hampshire is copying Mass (not the other way round).

    People flee California and go to Colorado – and they are making it like California in politics.

    All the above is because people do not understand basic principles (most importantly of all – governement-spending-is-a-bad-thing-and-not-just-because-of-taxes) so empirical evidence passes them by.

    “What has this got to do with the auto industry?”

    Sadly there is more chance of the non union car plants in Alabama and the rest of the South being made union plants, than there is Detroit going nonunion.

    Unless people can be made to understand principles and to act on them – as you suggest.

    But remember there are plenty of self described “defenders of the Redneck” who go out of their way to mislead people (Senator James Webb springs to mind – good Marine though he was). Who will tell people that unions and big government are good things.

  • RRS

    The U S auto industry will not fail.

    The currently most commonly followed business models will fail (and have failed).

    There will be cascading employment disruptions as the existing models are reformed or replaced (see: Steel; Eastern Airlines).

    But, there is relatively fixed demand for auto products. That demand will require extensive modifications of marketing methods (which are still mostly “habits”).

    The markets for the products have changed, and change more rapidly and further than the current business models for production (management and labor) respond.

    In the U S, the market is now mostly “replacement -driven.” The U S model did not move well to a developing world market of expanding, but tailored demand.

    The older practices of “planned obsolescence;” “new” models; “incentives;” etc. do not match the now better informed buyers.

    As now modelled, the “industry”is based on products that cannot bear their costs; a market that will not absorb its production; and marketing methods that do not match the customer base.

    There is grafted onto these domestic industry operations that have models that rationalize some but not all those factors. Still, the markets are limited – the demand that might otherwise sustain anything even resembling the status quo for related employment and economic activity is just not there, and can not be generated; nor artificially inseminated (though it may have been in the past).

    An auto industry will continue to exist, but in a highly rationalized format (including product distribution) with a workforce reduced to match the ultimate markets (See: Construction & Housing which have more far-reaching tentacles; but fragmentation as a saving grace – a clue for autos?).

    Under the provisions of the Constitution, Congress can create a special form of Bankruptcy procedures that might be (?) appropriate to rationalize large scale industries such as autos; a “loophole,” if you like in the present procedures. It is not likely, but it could be designed.

    Let us now proceed to newspapers, magazines, periodicals and other “fixed” media (books?).

  • In high school in 1985-6, I bought a used ’71 MGB, which (if memory is right) means Leyland. It was wonderful, when it ran. Any old car brings costs, but that MGB was a money pit. I can forgive the #3 piston rod endcap falling off leading to the piston getting hammered against the block and cracking it, which led to a full rebuild and new clutch, done in a HS auto shop class at minimal cost. I became well acquainted with salvage yards.

    Yet I cannot forgive my own ignorance of how outdated so many things on that car were: lever shocks, manual everything (in reflection, probably best: less to go wrong), natural rubber seals everywhere (chronic cost of time and money), the crap bonnet latch, twin SU carbs that needed occasional tweaking, the pathetic heating system (until the heater core rusted out, so I bypassed it entirely with a U-loop of hose), an unnerving amount of cotter pins, and–worst of all–Lucas electrics that constantly failed or disconnected. I recall a T-shirt marketed in a classic car mag that showed a guy looking skyward, shaking his fist, and swearing, “*?-^#&+@! Lucas!”

    Oh, but when that MGB ran, there was nothing better! Low riding, top down, felt every bump in the road, slamming into 3rd gear–superb.

    Though I never had one (but wanted a ’72 Triumph Bonneville 650 Mk. V), I recall people bemoaning their British motorcycles. Gorgeous machinery, but Whitworth units, oil-dripping vertically-split crankcases, spare parts troubles, and the need to use Locktite to secure bolts meant a Japanese bike became the easy and obvious choice.

    Did British motor management assume everyone liked to tinker to keep their machinery running? It seemed that once they finally put a synchronized 1st (or bottom, if you prefer) gear into the transmission, they sadly quit innovating.

  • Sunfish

    Chris-
    It ain’t just British bike makers. What’s the joke about Harley-Davidson, for turning gasoline into noise without any of that annoying horsepower? (BTW, if you own a H-D I apologize for any offense. But for the love of God don’t start your bike. It’s out of fluids. I can tell by the lack of leaks.)

    Paul-the plant (in the US) that made my Toyota wasn’t unionized then and it isn’t unionized now, I don’t think. Anything might happen down the road, but for right now frankly I see Toyota closing it down and either moving production to Mexico or abandoning it entirely,(depending upon what an Obama-controlled NLRB and USDofC do), rather than putting up with the UAW.

  • Howard RGray

    I will be buying a car in the next few weeks when I get to my new house in New Hampshire; I won’t be buying one of the GM turkeys, irrespective of Thanks Giving.

    “If the Democrats do decide to rescue the US car industry via a bail-out, they will rationalize and reorder. Perhaps they will even wish to intervene as to which models and which research should be undertaken. Think of the opportunity for renewables…renewing jobs, renewing pork, renewing votes. By the end of this process, it is doubtful if there will be any US car industry at all. Congress will have undertaken a wonderful role in clearing out the undergrowth for more efficient rivals and Detroit will go the way of Morris, Austin and the Triumph”

    These words by Phil Chaston make sense, so why buy a car that won’t be supported in the future? Sorry GM you were once great but not any more.

  • llamas

    Kev asked:

    ‘What I don’t understand, is why. Why the hell don’t Ford and GM just grab some designs from their European branches and start churning them out in Detroit? ‘

    And I will now explain just why that is.

    The Big 3 already offer a whole raft of small, high-mileage vehicles. Just go to http://www.fueleconomy.gov and see for yourself. Some are domestically-designed, some are brought in from their European arms and Americanized. They have plenty of these products. Considering that they make the mileages they make on US-regular, 87-octane, oxygenated gasoline, they’re actually pretty nifty engineering.That’s not the problem.

    Get ready, because the explanation is coming. It will amaze you.

    The problem is CAFE, or Corporate Average Fuel Economy standards. These are Federally-mandated standards for average fuel economy. Seems like a great idea, no?

    Well, the worm in the apple is the 2-fleet provision. This requires that the Big 3 meet CAFE standards for 2 different fleets – domestically-built and imported.

    What that means is that, in order to sell any other models that are built in the US, they must build the smaller more-efficient cars in the US also – using UAW labour at UAW rates. The smaller cars tend to be much-more-impacted by higher labour rates than the larger models.

    So the Big 3 must compete with domestically-built smaller cars from other makers – Honda, Nissan, Mazda, Toyota, they all have US assembly plants, all of them non-union – with their own smaller cars, built with UAW labour – which runs about 2x per hour what non-UAW labour costs. Plus, the Big 3 are dragging a pension-liability legacy that would choke a horse – GM alone has over 500,000 retirees, all with generous pensions and gold-plated healthcare benefits.

    And they can’t import the cars to avoid the union labour bill, because they must meet domestic-fleet CAFE standards – they must build those small cars in the US or give up all of the larger, more-profitable lines which the consumer has typically favoured heavily up until the last few months. So they can offer all the small, high-mileage vehicles they want – the CAFE trap simply makes them cost $2-3K more than comparable products form any other domestic maker. In these times, that’s a war you can’t win.

    I have absolutely zero sympathy for the Big 3 and their current plights. But in this one area – where the government and the UAW conspired to put the 2-fleet CAFE noose around their necks – I could agree that they have been unfairly hampered in doing business. They agreed to it when times were good, gas was cheap and everyone wanted a LWB Tahoe – but they should have looked ahead.

    Detroit has plenty of good, small cars that get great mileage. Their quality is very good and getting better all the time. If they were built in non-union domestic plants, they would give Honda and Toyota a real headache. But they’re not, and they will not be until someone can break the UAW’s death-grip on the Big . A bankruptcy judge, maybe . . . .?

    So now you know.

    llater,

    llamas

  • Was just turned on to this site…great!
    Bail-out the US Car companies? No. What the feds shouldn do this ONE TIME is to pay the retirement funds “earned” by UAW workers. Then make sure that union membership is voluntary, and all union voting is done in complete secrecy. Let GM Ford Chrysler go bankrupt.
    Cars can be profitably built here in America. Look at the Honda and Toyota plants in the Midwest and south. These companies have had no problem in recruiting a responsible and competent work force by offerring a moderately high salary, steady employment, decent health insurance and reasonable pension plans. They do not have to deal with UAW, a racket and on of the worst examples of the results of the “mixed” economy. The UAW takes a bite of every paycheck, they pay themselves large salaries which they justify by being able to make campaign contributions to those candidates who support this self feeding cycle. The snake has eaten its tail , and is working on its own neck!
    The system of forced union membership, forced union dues and political finegeling to protect the first two is the reason for this crisis.
    Plan:
    1. One time payout of outstanding retirement obligations for the “Big 3″.
    2. Allow them to fail. Capitalism will prevail. These companies will be reorganiozed meaner leaner and hungrier!
    3. End the labor monoploly enforced by the UAW and let labor prices be priced by the market.
    4. Libertarianism can only succeed within national borders. Therefore the government has a legitimate role to erect trade sanctions at the border. Any cars produced in exploitive economic conditions in which labor is not entitled to organize into unions, should have a surcharge placed on it, equal to what it would be if made here. (I am against monopolistic coercive unions like UAW, not unions in general.)

  • Jerry

    “If the Democrats do decide to rescue the US car industry via a bail-out, they will rationalize and reorder. Perhaps they will even wish to intervene as to which models and which research should be undertaken. Think of the opportunity for renewables…renewing jobs, renewing pork, renewing votes. By the end of this process, it is doubtful if there will be any US car industry at all. Congress will have undertaken a wonderful role in clearing out the undergrowth for more efficient rivals and Detroit will go the way of Morris, Austin and the Triumph”

    I REALLY hope the above is a sarcastic statement ’cause otherwise …………………

    Yep, if anyone knows how to run a business or ‘fix’ one that is in trouble it’s Washington/congress !!!

    Are you serious ????

    Most of them couldn’t run a temperature, let alone a business. If they could, they wouldn’t BE in government !

    There has already been talk about government deciding which cars and what kind to produce !!

    What till the environazi’s get hold of that little piece of control.

    And, ‘more efficient’ is just over the top.
    Name ONE THING that government has EVER touched that became ‘more efficient’.

    What Detroit will become is a bloated GOVERNMENT bureauracracy that will determine that we all should be driving a $50K Yugos ( to save the planet of course through less pollution and higher death rates – ’cause humans are the ultimate pollutant according to some of them !! )

    Ditto to what Chris said.
    Owned a 69 Triumph GT6+. What a money pit !
    Some of the strangest engineering I’ve EVER seen. For instance – natural rubber seals ?? WHY ?? ‘Cause they’re better ! Uh, yeah, right !!
    Fun when it ran but …….
    about as reliable as a nitro truck with a broken axle !

    As llamas explained, most problems are from already existing regulations/rules/laws etc. There are some models that simply CANNOT be imported becuse is ‘messes up the numbers’ CAFE and otherwise.

    Not to fear though, poor readers, gobernment will fix everything just as it always has !!

    God help up !!

  • Paul Marks

    Sunfish:

    I know the auto making plants of South Carolina, Tennessee, Senator Shelby’s Alabama (and so on) are not unionized.

    But you know as well (or better) as I do that the Democrats plan to destroy this ununionzed industry.

    How many Democrats voted against “Card Check” when it last came up in the House of Representatives?

    No Democrats at all voted against “Card Check”, if I recall correctly.

    The Democrats love ununionzed manufacturing industry (indeed unionized anything) about as much as they love the conservative part of talk radio – and they have plotting against both.

    That is what they do.

  • llamas

    Sunfish wrote:

    ‘If I’m going to spend forty grand on something the approximate size of a Toyota Land Cruiser, I damn well expect it to handle as well as an LC and to have the same reliability as the Toyota. I can get that from Toyota. Escalades/Trailblazers handle for crap and spend entirely too much time in the shop.’

    Why? Why should two cars that cost about the same, perform about the same? (Incidentally, if you can find a new LandCruiser for 40K, tell me where – they start at 65K (for 2009) and actually run about 10% more expensive than the comparable Cadillac Escalade. And I’m not sure quite why you would think this a fair vehicle to comapre with the Trailblazer, which sells for about half as much.)

    The LC/Lexus RX is a somewhat-performance-oriented SUV, the Escalade is a boulevard cruiser with the accent on highest-end luxury appointments. We can each have our opinions about the relative merits of these market directions ( I think they’re both stupid, but that’s just me) but there doesn’t seem to be a lot of merit in condemning one because it doesn’t do what you think is important in a vehicle of that size.

    Reliability? Fair enough.

    And then

    ‘I see Toyota closing it down and either moving production to Mexico or abandoning it entirely,(depending upon what an Obama-controlled NLRB and USDofC do), rather than putting up with the UAW.’

    I don’t agree.

    Ron Gettelfinger (UAW president) has a degree in economics and is a smart guy. He may be the first of a newer breed of UAW leaders who are NOT tub-thumping, cigar-chomping morons. Like it or not, he must see that the future of his union, if it has any, is with the new-style US auto plants and not at Dodge Main or Sterling Heights Stamping. The UAW workers at those plants, who want their feather-bedded jobs-for-life gravy train to keep on rolling, are already dead – they just don’t know it yet.

    I’ll wager that in 2 years or less, we’ll see Gettelfinger organizing the Toyots and the Hondas and the Mazdas for the UAW – but in a whole new model of union contract, more in the European line, perhaps. Toyota is not averse to unions per se - it’s the UAW as presently practised that gives them a bellyache. Gettelfinger must see that, and must see that his union’s way forward is with them, not against them.

    Unless, of course, the zombie morons from Dodge Main and SH Stamping take the union back from him and put it back on its old path. Which could happen.

    llater,

    llamas

  • This is one of the strangest blog comments I’ve ever written, but the current global financial situation makes me glad that the majority financial stake in Ford’s former premium brand (Aston Martin; Ford retain a 15% stake) is now Kuwaiti.

    The management is now British, again, courtesy of ProDrive, who raised the backing to effect the purchase.

    Full disclosure: I’m privileged to own and drive DB7 Vangate #3066, from a final production run of 4438.

  • (Sorry, and yes that should be “Vantage” rather than “Vangate”; finger trouble.)

  • tdh

    The Consumer Reports Buying Guide for 2009 is out.

    All of Acura’s new models that have sufficient history for a forecast are above or well above average. Same with all of Honda’s, except the merely-average Odyssey. Toyota is almost as good, with the Camry non-Solara below and the Tundra 4WD well below average.

    The best that Chevrolet, Cadillac, or GMC could do was average. Mercury and Chrysler were mixed. Ford was mostly average, some above average. Lincoln would have been all above average had the Mark LT not been far below.

    Bailing out mostly-foreign car companies like GM, Ford, or Chrysler would be a disservice not only to taxpayers of future generations, but also to today’s consumers. Let them go Chapter 11, sink or swim.

  • Sunfish

    Llamas,
    So my prices are out of date. I don’t shop very often, as I don’t wear cars out very much. The only times I’ve ever had one fail before 100K, they were all GM products.

    As for expecting two comparably-priced vehicles to give comparable performance: it certainly seems reasonable to me to expect that if they both cost the same but one is more fit for most or all purposes than the other, then the other will fail and so will the company hitching its wagon to that particular star.

    Re: the UAW: they’ve said, in the last week, that they intend to make no concessions at all to GM. To me, that says that A: they expect a sympathetic Congress to keep GM out of bankruptcy court, and B: non-union automakers should probably not expect any form of reasonable adult behavior from the current UAW leadership and that it would be worth a great deal to not do business with the UAW. In the present state of US labor law, if the UAW wants into a Honda plant, then Honda can either become a UAW-run company or move its production to Mexico.

  • llamas

    Sunfish – regarding the ‘same-price’ issue – for $65K, you can buy a Totota Landcrusier/Lexus RX, or you can buy a nicely-equipped Corvette.

    Do you expect the Corvette to have the off-road ability of the Lexus? Do you expect the Lexus to have the 0-60 time of the Corvette?

    Regarding the intransigence of the UAW – you may well be right. But they announced yesterday, for example, that they are open to the idea of doing away with the ‘Jobs Bank’ idea – one of my personal betes noir, and the most flagrant exmaple of UAW featherbedding I know of. They also have made noises that one of the most precious work rules for skilled trades, whereby any non-union worker (electrician, millwright, &c) must be accompanied by a union worker of identical skills, is also up for discussion.

    These are the practices most beloved of the bovine element of the UAW, whereby skilled workers get paid to do nothing, and the most-flagrantly self-evident ways in which the Big 3 are simply bleeding money.

    So maybe there is some hope. I say again, Ron Gettelfinger is a smart guy and I hope he can prevail.

    llater,

    llamas

  • Cap'n Dan

    US car manufacturers have proven in the last 10 years that they can build vehicles to match anyone else in the world. They’ve finally mastered the art of the small car, as well as the big pickups that are a mainstay. Unfortunately, the US Big three signed an absolutely ruinous contract with the UAW a few years back. Its provisions for retirement, pay, and healthcare far exceed what nonunion employees are paid in Honda and Toyota plants in the US. The unions and the manufacturers thus find themselves hoist on their own joint petard. Until this union contract is broken, the US auto industry will continue to be outsold by its competition. It doesn’t matter how good the product is, the competition can build one just as good for far less money. Capitalism lives, and to their ill-fortune, the Big Three have proven it so.